The Sunday Brunch: Who Won, Who Lost In The Budget Fight.

Pennsylvania has its first on-time state budget in nine years. But as is the case with any major legislation, there are winners and losers. Here's a quick look at whose stock went up and whose went down in the $27.15 billion spending plan that took effect Friday.

GOV. TOM CORBETT

While Pennsylvanians can disagree about the impact of Corbett's first budget — and make no mistake, they do — Corbett did sign the budget on time, kept spending to the level he wanted and did it without passing any general tax hikes (personal income, sales) to the taxpayers.

"It's a huge benefit. It's a huge plus" for a new governor to score that big out of the gate, said G. Terry Madonna, a political science professor and pollster at Franklin & Marshall College in Lancaster. "There's no way to say that it's not."

After making it clear he wouldn't sign the budget without it, lawmakers sent Corbett a bill with strictly worded exceptions to a five-year-old law requiring school districts to hold a referendum on any tax hike that outpaces inflation. Districts got a break on special education and employee pension costs and pre-existing school construction debt.

Lawmakers also sent Corbett a bill radically overhauling the way damage awards are parceled out in civil lawsuits and one expanding the right to use deadly force in self-defense, though neither is part of the budget.

The governor was denied action until fall on a school voucher/reform package, a key legislative priority.

VERDICT: Winner.

THE GENERAL ASSEMBLY

As they negotiated their first spending plan, new House Majority Leader Mike Turzai, R-Allegheny, and Appropriations Chairman Bill Adolph, R-Delaware, were able to hold together a caucus that represents a vast spread of both geographic loyalties and political philosophies.

They were so effective that only two GOP lawmakers, Reps. Dennis O'Brien and John Taylor, both from Philadelphia, split with their caucus to vote against the main budget bill.

Corbett had a tougher time in the Senate, where relations have always been frostier.

Majority Leader Dominic Pileggi, R-Delaware, and President Pro Tempore Joe Scarnati, R-Jefferson, gave Corbett the votes he needed to get his agenda through the chamber. But both men were no-shows for the budget-signing ceremony late Thursday night. Corbett shrugged off their absence with a joke. But there was symbolism to their staying away.

House and Senate Democrats were denied a seat at the negotiating table and found their efforts to amend the spending plan stymied at every turn.

The administration balanced its budget, an overall cut of roughly 3 percent over current spending, in part by slashing more than $1.1 billion in education funding for public schools and 18 state-supported universities.

The administration has cast that as an increase because it returns direct state support to districts to the levels they received before the appearance of federal stimulus money, which is not included in this year's budget.

Still, districts in the Lehigh Valley and elsewhere have eliminated teaching positions to save money.

Other line items for K-12 education, including one allowing high school students to earn college credits before they graduate, were spiked. The budget includes $100 million, eliminated in Corbett's initial budget proposal, for grants to provide programs such as after-school tutoring and full-day kindergarten.

Taxpayer support for the four state-related universities — Penn State, Temple and Lincoln universities and the University of Pittsburgh — is cut by roughly $130 million, or 19 percent over fiscal 2010-11 levels.

The 14 schools in the Pennsylvania State System of Higher Education, which include Kutztown and East Stroudsburg universities, take an 18 percent, or $90 million hit.

Both Temple and the state system's board of governors announced tuition hikes this week.

VERDICT: Loser.

PUBLIC WELFARE SPENDING

Line items across the budget for the state Department of Public Welfare were reduced. Accounts covering everything from state support for hospital burn centers to county child welfare programs took a hit.

Lawmakers approved, and Corbett signed, a bill transferring authority over hundreds of millions of dollars in public welfare spending from the General Assembly to the administration. The action gives the welfare department the power, if it chooses to wield it, to change eligibility requirements, reduce cash assistance and impose higher co-pays.

Democrats cast the move as a power grab without public discussion. The administration said the sweeping authority was needed because of the state's dire budget situation.

"The conventional processes simply would be too cumbersome and time-consuming. This truly is a case where time is money," welfare department spokesman Michael Race said.

Activists disagreed, predicting "an awful lot of people … who are going to end up losing the support they so desperately need," Sandra Strauss of the Pennsylvania Council of Churches said.

VERDICT: Loser.

BUSINESS/ECONOMIC DEVELOPMENT CLIMATE

The administration's budget permanently phases out the state's capital stock and franchise tax paid by business. It also brings state tax policy into line with federal policy by giving a roughly $300 million tax break to businesses that invest in new equipment.

The state's booming natural gas industry ducked a local impact fee on Marcellus Shale exploration. Corbett threatened lawmakers with a veto if they sent him a bill, delaying action until the fall. A shale-impact study commission will submit its final report this month.

The business community also supported the changes to damage rules in civil lawsuits that Corbett signed into law this week.

Current Comments

While business should be justifiably happy with passage of tort reform and the continued phase-out of Capital Stock & Franchise Tax, they should not be as happy with the budgetary dismantling of DCED. I do not see how DCED can achieve its core missions re business and economic development given the final Budget. If one looks at dollars devoted to expanding manufacturing and workforce development (re training skilled manufacturing workers) I do not see a reversal of the downward trend in this Budget and I welcome someone with a different view to give me some data that would convince me otherwise.

Posted By: vince phillips | Jul 5, 2011 2:20:21 PM

A budget is a moral as well as a fiscal document.
This budget is so lacking on both counts that words fail to express my outrage